THE EQUALITY TRIBUNAL
EMPLOYMENT EQUALITY ACTS 1998-2011
DEC – E2014-063
Slawomir Marciniak, Wislaw Marciniak, Viktors Stanko, Adrian Kondratowicz, Lukasz Majdzinki, Jannsz Majokinski, Dairis Ostasovs
(represented by Tiernan Lowey B.L. instructed by Houlihan & Partners Solicitors)
versus
Golden Vale Dairies Ltd.
(represented by Pauline O’Hare, IBEC)
File reference: EE/2010/819, EE/2010/820, EE/2010/821, EE/2010/822, EE/2010/823, EE/2010/824 and 825
Date of issue: 29th August 2014
Keywords: Employment Equality Acts, Race, Equal Pay, Conditions of employment, Transfer of Undertakings, Grounds Other Than, Collective Agreement,
Dispute
1.1. The case concerns a claim by one Latvian and six Polish complainants against Golden Vale Ltd. On their EE1 forms, the complainants claim discrimination regarding conditions of employment (see Appendix ) on the grounds of race contrary to 6(2)(h) of the Employment Equality Acts 1998 - 2011 [hereinafter referred to as ‘the Acts’]. The complainants claim equal pay with named comparators as well as that a collective agreement is discriminatory.
1.2. Through their legal representative, the complainants referred their complaints under the Acts to the Director of the Equality Tribunal on 3rd November 2010. On 25th May 2012, in accordance with his powers under Section 75 of the Acts, the Director delegated the case to me, Orlaith Mannion, an Equality Officer for investigation, hearing and decision and for the exercise of other relevant functions of the Director under Part VII of the Acts. On this date, my investigation commenced. A Hearing was held on 4th and 5th October 2012 as required by Section 79(1) of the Acts. Correspondence continued until 13th August 2013.
Preliminary issue – Non-attendance of 2 complainants
2.1 I notified the parties of the date of the hearing, by registered post, on 22nd August 2012. I am satisfied that all reasonable efforts had been made to inform all seven complainants of the hearing. However, two complainants (Adrian Kontravickz and Darius Ostasos) did not attend the hearing. In the light of the foregoing and in accordance with Section 79(6) of the Act I issue the following decision:
2.2 As part of my investigation under Section 79 of the Act, I am obliged to hold a hearing. I find that the failure of Adrian Kontracickz and Darius Ostasos to attend such a hearing was unreasonable in the circumstances and that any obligation under Section 79 has ceased. As no evidence was given at the hearing in support of the allegation of discrimination in relation to these two complainants, I conclude the investigation of their complaints and find against the complainants Adrian Kontravickz and Darius Ostasos.
Summary of the complainants’ case
3.1 They were employed as Production Operatives in the Dairies division at the processing plant at Lansdowne, Co. Limerick. The complainants submit that there was a different contract for Irish employees than for Non-Irish Nationals. The Irish benefited from the ‘Analyse Hours contract’ which meant they were entitled to leave the site when their duties were finished and also received an annual efficiency bonus of €1,451. They were paid for 50.75 hours per week irrespective of whether or not they actually worked this number of hours in the a week. If they were sick, they also received nine weeks sick leave on full pay.
3.2 The complainants submit that non-Irish nationals were on a 39-hour contract and were not entitled to leave until they had completed their daily rostered hours. Neither did they review a bonus. If they were sick, they were only entitled to six weeks sick pay. The ‘Analyse hours’ contract sucked up potential overtime for those not on it. The complainants submit that there was little incentive for them to work efficiently.
3.3 The complainants submit that non-Irish nationals had to use as different changing rooms with smaller lockers and no washroom.
3.4 Regarding pay, the complainants are paid €11.57 per hour. Those on an Analyse Hours contract were paid €37,000 or €43,000 depending on the job they did. If the comparator worked 39 hours his hourly rate would equate to about €21.20. The complainants submits they were doing like work.
3.5 Cases cited were the UK casesR v Birmingham CC ex parte EOC[1], Glasgow City Council v Zafar[2] as well as the Labour Court case Ntoko v Citibank[3], and the Court of Justice of the European Union Enderby v Frenchay Health Authority[4], Kowalski v Freie und Hansestadt Hamburg[5]and Nimz v Freie und Hansestadnt Hamburg[6] .
Summary of the respondent’s case
4.1 The respondent denies discrimination on the grounds of race regarding conditions of employment. The respondent readily acknowledges like work with both comparators but submits that the differences in pay were based on grounds other than nationality. The respondents submits that the complaints raised under Section 86 of the Acts are irrelevant and misplaced as the complainants are not affected by the provisions of a collective agreement as only those on the Analyse Hours Contract are subject to a collective agreement between the respondent and SIPTU. Should the Tribunal be of the view that the complainants are affected by a collective agreement, the respondent submits that there is no case whatsoever to be made that the provisions of same are null and void in accordance with Section 9 of the Acts.
4.2 The respondent is part of Kerry Group plc. The Kerry Group acquired the Golden Vale, Lansdowne facility (where the complainants worked) in 2001. The respondent inherited 32 production employees as well as a pay structure from Golden Vale as part of the transfer of undertakings. This pay structure included what was colloquially known as Analyse Hours Contract – which is an annualised hours agreement whereby employees are contracted to work a maximum of 50.75 hours per week. Any hours worked in excess of this can be banked by the employee and claimed back as time in lieu. If an employee has worked fewer hours than this in a week, the respondent gets to bank the hours and the employee must catch up within the quarter. This salary is an all-inclusive amount i.e. no extra is given for overtime or public holiday pay. The purpose of the Analyse Hours Contract was to provide an incentive for employees to maximise production and for the respondent to avoid breaches of the Organisation of Working Time Act 1997.
4.3 By 2005, the dairy market in Ireland was under great stress. There was a fall in demand for milk as it was perceived as fattening, 20% of milk sold in Ireland was being imported and operating costs were increasing e.g. electricity, labour etc. Kerry Group decided to close production in Dawn Dairies in Limerick and transfer production from there to Lansdowne in Limerick. As a result, there was an increase in production at Lansdowne so the respondent recruited a number of employees, both Irish nationals and non-Irish nationals (including the complainants). These new recruits were employed on a fixed-term 39 hour 5-over-6-day contract – called the 39 hours contract. These employees were entitled to overtime and double time on Sundays while those on the Analyse Hours Contract were not. More Irish nationals than Non-Irish nationals were employed on 39-hour contracts. Due to a decrease in production volume in 2010 the employment of four employees was terminated – out of the four employees, two were Irish and two were non-Irish nationals.
4.4 The respondent submits that if the complainants worked 50.75 hours per week, their salary was roughly equivalent to that of their comparators. However, the respondent acknowledges that when the complainants started it was a time of high production but that declined due to aggressive discounting by competitors and increased cost of raw milk from farmers. Therefore, the necessity for overtime decreased.
4.5 The respondent rejects the submission by the complainants that those on the Analyse Hours Contract were free to leave the workplace once their tasks were completed while those on the 39-hour contract had to stay. Employees on both contracts were obliged to remain on site until all work is completed. The respondent does not deny that those on the Analyse Hours contract received an efficiency bonus but reminds the Tribunal that the respondent had statutory and contractual obligations to honour it.
4.6 Regarding the locker rooms, the people on the Analyse Hours Contract were more senior. Therefore, they used the original locker-room which could only hold the original production line. When there was a recruitment drive in 2005, a new locker room was created. It was renovated, refloored and new lockers put in. The respondent submits that it was a nicer locker room than the original one as it was newer. Both Irish workers and non-Irish workers shared it. The respondent submits that it is offended at the suggestion that it would segregate Irish employees from foreign employees. They also point out that there was only one canteen on the premises shared by everyone.
4.7 In relation to equal pay, the respondent argues there are grounds other than race for the difference in pay. The Analyse Hours Agreement had been agreed and negotiated between SIPTU and Golden Vale before Kerry Group acquired it. Under S.I. No. 306 of 1980 European Communities (Safeguarding of Employees’ Rights on Transfer of Undertaking) Regulations 1980 the respondent points that they are legally obliged to safeguard the transferring employees’ rights:
3. The rights and obligations of the transferor arising from a contract of employment or from an employment relationship existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee.
4. (1) Following a transfer, the transferee shall continue to observe the terms and conditions agreed in any collective agreement on the same terms applicable to the transferor under that agreement, until the date of termination or expiry of the collective agreement or the entry into force or application of another collective agreement.
4.8 The respondent acknowledges that the Analyse Hours Contract represented a bad deal for them but they were legally obliged to maintain it. They maintain this legal obligation is a ground unconnected with race. This is emphasised by the fact that Irish employees recruited at the same or subsequent to the complainants’ recruitment were also on 39-hour contracts.
4.9 The respondent cites Tracey v Uniphar plc where a complainant a female warehouse supervisor claims she was entitled to the same rate of remuneration as a named male comparator. Like this instant case, there was an amalgamation of two companies and employees retained the terms and conditions of employment. Like work was also conceded. Her named comparator was a warehouse supervisor since 1980 i.e. prior to the amalgamation in 1994. She was employed in 1995 (after the amalgamation). A man was employed in 1998 and he was paid a lower salary than the complainant and comparator. The Equality Officer found that there were grounds other than gender for the pay differential.[7]
4.10 The respondent also cites the High Court case 550Sales and Clerical Assistants v Pennys where Laffoy J vindicated the Labour Court’s approach of historical, economic and operational reasons as grounds other than gender for a difference in pay:
25. It seems to me that the Labour Court did precisely what it was enjoined to do by Barron J. in his judgment. It found that there was a reason unconnected with sex for the difference in remuneration between the Applicants' group and the comparator group. That reason was rooted in history: between 1974 and 1979, the comparator group traded the removal of inflexible, uneconomic and unproductive work practices for increases in pay and in so doing its pay scale passed out the pay scale of the sales assistants and the clerical assistants, who did not have the same negotiating leverage. Moreover, the Labour Court found that the reason still subsisted at the date of its second determination, in that the flexible and productive work practices introduced between 1974 and 1979 continue to be applied and continue to generate economic benefits for the company. The Labour Court found not only that the pay differential between the two groups was historically objectively justifiable on economic grounds but also that it continues to be and is currently objectively justified on economic grounds, in that it would be economically disadvantageous to the Respondent to revert back to the old work practices and, in any event, the extra pay could not be removed from the comparator group without serious industrial relations consequences.[8]
4.11 Other cases cited by the respondent are Enderby, Department of Justice v CPSU[9], National University of Ireland v Ahern[10].
Conclusions of the Equality Officer
5.1 Section 6(1) of the Act provides that discrimination shall be taken to occur where on any of the discriminatory grounds mentioned in subsection (2) one person is treated less favourably than another is, has been or would be treated. The discriminatory ground in this case is race. On the race ground, the issues for me to decide are:
(i) Were the complainants discriminated in relation to conditions of employment on ground of race in terms of 8(1)(b) of the Acts?
(ii) Are the complainants party to a collective agreement and if so does it contain a discriminatory provision to be declared null and void?
(iii) Are the complainants entitled to equal pay with their named comparators?
5.2 In evaluating the evidence before me, I must first consider whether the complainant has established a prima facie case pursuant to Section 85A of the Acts. The Labour Court has stated in Melbury Developments Limited and Valpeters:
Section 85A of the Act provided for the allocation of the probative burden in cases within its ambit. This requires that the complainant must first establish facts from which discrimination may be inferred. While those facts will vary from case to and there is no closed category of facts which can be relied upon. All that is required is that they be of sufficient significance to raise a presumption of discrimination. However, they must be established as facts on credible evidence. Mere speculation or assertions, unsupported by evidence, cannot be elevated to a factual basis upon which an inference of discrimination can be drawn. Section 85A places the burden of establish the primary facts fairly and squarely on the complainant and the language of this provision admits of no exceptions to that evidential rule.[11]
Collective Agreement
5.3 The complainants argue that the New Working Agreement For Production employees based in the Fluids Milk Division Lansdowne Limerick effective 13th January 2001 negotiated between SIPTU and Golden Vale which led to the Analyse Hours Contract is a collective agreement within the meaning of Section 2 of the Acts i.e. an agreement between an employer and a body or bodies representative of the employees to which the agreement relates. I agree with the complainants in this. However, they complainants were not party to this agreement. They did not work for the respondent at the time that it was negotiated. It applied to a discrete group of the respondent’s employees of which the complainants were never part of. As per Department of Finance and Seven Named Employees, even if I found the agreement to apply to them and that a provision in it was discriminatory, I would not be able award them the redress they seek – compensation[12]. I would merely have the power under Section 86 of the Acts to declare the impugned provision discriminatory. For the avoidance of doubt, I do not find any provision of the aforementioned collective agreement to be discriminatory. Therefore, this strand of the complainants’ case fails.
Conditions of Employment
5.4 Regarding conditions of employment, Section 8(6) of the Acts states that an employer shall be taken to discriminate against an employee in relation to conditions of employment if, on any of the discriminatory grounds, the employer does not offer or afford to that employee the same treatment [my emphasis] in relation to overtime, shift work, short time, transfers, layoffs, redundancies, dismissals and disciplinary measures as the employer offer or affords to another person where the circumstances in which both such persons are employed are not materially different.
5.5 Without doubt, the Analyse Hours Contract was a lucrative deal for the employees fortunate enough to be on it. At €37,000 (plus bonus), it was higher than the average annual earnings for all sectors in the Republic of Ireland (€36,117) in 2010 for what was unskilled manual work.[13] The respondent attempted to argue that when complainants earned overtime they could earn more than those on the Analyse Hours Contract could. However, the respondent could only point to one month where any of the complainants earned more than any of the comparators on the Analyse Hours Contract.
5.6 Both the complainants and the respondent cite Enderby:
17. It is for the national court to assess whether it may take into account those statistics, that is to say, whether they cover enough individuals, whether they illustrate purely fortuitous or short-term phenomena, and whether, in general, they appear to be significant.
It is an undisputed fact that there were no non-Irish nationals on the Analyse Hours Contract. This contract was negotiated in 2001 before the huge increase in immigration to Ireland (2005 to 2008). The potential workforce in Limerick was mainly indigenous in 2001 and those employed on the Analyse Hours Contract reflect that. There was a seniority list of existing employees waiting to get on to this contract. Because it was worthwhile few people on this contract moved on to other employers so those on the seniority list (including the complainants) were, more or less, waiting for somebody on the Analyse Hours contract to retire before they were offered it. In 2007, access to the Analyse Hours Contract was closed off due to the huge drop in revenue by the firm. Slavomir Marcinak was second in line for the Analyse Hours Contract when it was closed off. While he was unfortunate, I do not find the action by the respondent was discriminatory. Zafar is constructive regarding this:
It is, however, a wholly unacceptable leap to conclude that whenever the victim of such conduct is black or a woman then it is legitimate to infer that our unreasonable treatment was because the person was black or a woman. All unlawful discriminatory treatment is unreasonable but not all unreasonable treatment is discriminatory and it is not shown to be so merely because the victim is either a woman or of a minority race or colour.[14]
5.7 I find that the respondent closed off the Analyse Hours Contract to new entrants because it was no longer economically viable, not because Mr Marcinak was likely to be offered it in the medium term. NUIC v Ahern is also relevant here. In that case, the Supreme Court found that complainants (security guards/porters) are entitled to pick their own comparators (part-time switchboard operators) but ‘for this purpose the Labour Court ought to have looked at the position of the comparators, not only in isolation, but also in the context of the other persons in the same grade who had not been chosen as comparators, namely the remaining switchboard operators.’[15] It is a fact that cannot be ignored that 25 Irish people in comparison to 24 Non-Irish people were employed as Production Operatives on the same contract as the complainants.
5.8 Regarding the locker room issue, I prefer the evidence of the respondent. Those on the Analyse Hours Contract were more senior and therefore occupied the original locker-room. Irish and Non-Irish nationals occupied the other locker rooms. There was not a policy of segregation in place.
5.9 For all of these reasons the complainants’ case fails regarding conditions of employment.
Equal Pay
5.10 Section 29 (1) of the Act provides that where A and B represent two people of the different nationalities it shall be a term of the contract under which A is employed that A shall at any time be entitled to the same rate of remuneration for the work A is employed to as B who, at that or any other relevant time, is employed to do like work by the same or associated employer. However, Section 29 (5) states that nothing shall prevent employers from paying, on grounds other than the discriminatory grounds, different rates of remuneration. As like work was conceded, I will examine the grounds other than race for the difference in pay between the Analyse Hours Contract and the complainants’ pay.
5.11 I fully accept that the respondent was statutorily and contractually obliged to maintain the terms and conditions of employment of those on the Analyse Hours contract when they took over the Golden Value creamery. At that stage, the complainants were not employees of the respondent. As per Section 29 (5), when they became employees, the respondent was entitled to offer them a different salary. I find the following are grounds other than race for the difference in pay:
(a) the TUPE obligations
(b) historical reasons - the Analyse Hours Contract was negotiated when the industrial relations landscape was very different
(c) operational reasons – the respondent needed to have a staff profile to match a flexible workflow
(d) economic reasons - it simply was not profitable to offer every employee an Analyse Hours Contract
Therefore, the complainants’ equal pay case fails
Decision
I have concluded my investigation of complaint of Slawomir Marciniak, Wislaw Marciniak, Viktors Stanko, Lukasz Majdzinki, and Jannsz Majokinski and hereby make the following decision in accordance with Section 79(6) of the Act. I find that
(i) The aforementioned collective agreement does not apply to them
(ii) They were not discriminated in relation to their conditions of employment
(iii) The complainants are not entitled to equal remuneration with any of the comparators
________________
Orlaith Mannion
Equality Officer
Appendix- Complainants that attended the hearing
| All complaints are on the ground of race | Slawomir Marciniak | Lukasz Majdzinski | Viktors Stanko | Wieslow Marcinak | Janusz Majdzinski |
| Nationality | Polish | Polish | Latvian | Polish | Polish |
| Commenced Employment | 22/03/2005 | 21/06/2006 | 14/05/2007 | 03/07/2006 | 11/07/2007 |
| Job title | Semis operator | General operator | General operator | General operator | General operator |
| Rate per hour | €11.57 | €11.44 | €11.44 | €11.44 | €11.44 |
| Comparator | Mr E | Mr Mc | Mr Mc | Mr Mc | Mr Mc |
| Salary of comparator | €43,000 | €37,000 | €37,000 | €37,000 | €37,000 |
| Discriminatory treatment re. conditions of employment | Y | Y | Y | Y | Y |
| Equal pay | Y | Y | Y | Y | Y |
| Discrimination regarding a collective agreement | Y | Y | Y | Y | Y |